History Of Sports Betting In The USA

Sports are so often about breaking records and passing torches. To that end, because the passage and implementation of PASPA were for so long deemed the most impactful event in the history of American sports betting, it makes a kind of ironic sense that PASPA’s Supreme Court overturn now holds that lofty distinction. Indeed, the elimination of PASPA is the most watershed moment in the history of US sports betting, as it has allowed an incredible, mostly-underground industry to leap back into the public eye and occupy the public consciousness.

PASPA was relegated to the trash-heap of history on May 14, 2018, and within just six months, seven states rolled out their own sports betting industries to go along with the established market in Nevada. These states – Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island, and New Mexico – account for the historic first wave of sports betting states. The first half of 2019 brought about the second wave of sports betting legislation. Over two dozen states had at least one sports betting bill introduced in a legislative chamber and several went on to passing a bill into law. Those states include Montana, Indiana, Iowa, Illinois, North Carolina, Tennessee, and New Hampshire.

There are now 18 states in total that have legalized sports wagering. Most industry analysts and political insiders believe that within just a few short years, nearly 80 percent of all US states will have some form of legal, state-sanctioned sports betting product on offer for their residents and visitors. The rate of sports wagering adoption – and the public polling popularity that the pastime enjoys – is truly staggering. Sports betting, after generations of being pushed the fringes of society, is finally finding its rightful home in the mainstream. And that means more jobs, more vibrant local economies, more choice, and – most important of all – more freedom for the tens of millions of honest, hardworking sports bettors in this great nation!

History Of Sports Betting In The USA Before The 20th Century

In the early 19th century, betting on horses was the most popular sport amongst gamblers. Though horse racing betting today involves pari-mutuel pools, horses played a role in developing the history of sports betting in the USA. It was with the establishment of professional baseball in 1876 that traditional sports betting came to the forefront. The National League was founded on February 2, 1876, followed by the American League in 1901. By 1877, however, the game started being influenced by gambling as years later, for example, it was discovered that the Louisville Grays were throwing games. During this time, the general attitude toward sports betting was laxer than throughout any other point in history, with the activity being viewed purely as a form of entertainment. There were even baseball pool cards which are similar to the parlay cards found in DE and other sportsbooks today. An article from the Washington Post in 1894 stated the following about Cap Anson, then-manager of the Chicago Colts:

“Uncle Anson has already started making wagers on the position the Chicago Colts will have in the race for the National League Pennant next year. He put up $100 a few days ago that his team would finish higher up in the race than the Pittsburgh Pirates.”

This goes to show how acceptable betting on sports was during the era, as in current times a manager would never be able to bet on his team. (Just ask Pete Rose!) It was not until 25 years later that the first major sports betting scandal occurred.

History Of Sports Betting In The USA During The 20th Century

After the turn of the century, sports betting was more popular than ever, but the Chicago Black Sox scandal brought its unfettered professional participation to a halt (and sullied the pastime in the eyes of many more puritanical citizens and lawmakers around the nation). Eight players on the Chicago White Sox were bribed into throwing the 1919 World Series, casting a dark shadow over sports betting that is still felt today. Regardless, as the history of sports betting in the USA during the 20th century shows, sports betting continued to grow among the general population, with even more sports coming into the fold. The 1920s are often referred to the “Golden Era” of sports, with collegiate football and basketball becoming popular sports betting options. During the Great Depression, football pool cards were in high demand due to the perception of quick, easy cash.

Though sports betting was prevalent, it is important to note that up until this point, sports betting was actually illegal. However, with no real sports betting laws and a lack of attention from law enforcement, the activity remained commonplace. It was in 1931 that Nevada legalized gambling, though other states remained more or less mum on the matter. Indeed, various New York crime families quickly filled this vacuum, offering numbers games and sports wagering services in states from coast to coast. The participation of the mob in sports betting led to the Interstate Wire Act of 1961 (which was also a gambit to protect state-run lotteries from “illegal” competition), which in-turn forced sports wagering to become a largely local thing in the regions where it was pushed underground. Nevada – particularly Las Vegas – began to be viewed as among the only legitimate places to bet on sports in the US.

Still, betting on sports was not big business in the state until the 1970s. It was during this time that congress lowered the 10% tax on sports bets that bookmakers were required to pay. Within a few years, more states moved toward legalizing sports betting. In 1976, Delaware began their sports lottery, and the Oregon Sports Action parlay game came in 1989. The Montana Lottery was created by voter referendum in 1986, with limited sports pools and fantasy sports betting options.

As more states started to consider legalizing sports betting, the more concerned congress grew. This prompted the government to find a legal means to stop the proliferation of sports betting across America. To achieve this, lawmakers wrote and enacted the Professional and Amateur Sports Protection Act of 1992 (PASPA). PASPA banned sports betting in the United States, except for in the four states that had already established legal sports betting operations, of which NV was the only one with real single-game wagering (as the other states were limited to glorified lottery tickets, sports-themed pull-tabs, and bingo-style games). Of all the moments throughout the history of sports betting in the USA, the passage of PASPA had the biggest impact on the overall betting landscape, and it would continue to limit public access to wagering until its Supreme Court overturn 25 years later (2018).

History Of Las Vegas Sports Betting

Las Vegas opened its first official sportsbook (called “turf clubs” at the time) and started accepting wagers in 1949 and have been doing so ever since. However, there was plenty of illegal sports betting going on in the city before then. Las Vegas is singlehandedly responsible for making sports betting so popular in America and the rest of the world. Another fact about the history of sports betting in the USA is the fact that the “juice” started in Vegas. When the first sportsbook opened in Sin City, there was an agreement with the casino that the book would pay 10% of their earnings to the casino. The sportsbooks way of making up for this money was to charge a “vigorish” on any bet that was placed, and that is why you have to pay juice to this day.

History Of Modern Sports Betting In The USA

When you fast forward to the 21st century, sports betting in the US looks dramatically different than it did in centuries prior. Sports bettors are able to bet on every sport imaginable, from football and basketball to tennis and golf and more. The point spread was introduced more than 50 years ago, but there are now a variety of straight and exotic wagers that bettors have become accustomed to. The advent of the Internet also changed how sports fans could wager, making betting on sports much more accessible. With Nevada being the only state offering single-game wagering, sports enthusiasts had very limited options when it came to safely placing bets. In the early 2000s, online sportsbooks began appearing all over the US market and became the norm for betting on sports. No matter where a bettor was located, they would be able to find Vegas-style sports betting action from the comfort of their home.

Just as the spread of sports betting signaled the US government to step in and stop expansion, the same incident occurred as online sports betting increased in popularity. In 2006, the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) was stealthily included as part of the larger SAFE Port Act. The SAFE Port Act was concerned with port security, making the UIGEA a completely unrelated law in the grand scheme. Signed into law on October 13, 2006, by then-President George W. Bush, the UIGEA is an act that prevents certain payment instruments from being used for online gambling transactions. The FDIC requires certain US financial institutions to monitor and restrict certain designated payment systems that include credit cards, checks, and wire transfers. Though the law does not make online sports betting illegal, nor does it punish bettors in any way, the UIGEA did cause many online sports betting sites to leave the US market.

Still, there are plenty of sports betting sites that safely serve USA sports bettors. All of the sites are based offshore, in locations like Costa Rica and Panama where remote gaming is legal. These sites are licensed and regulated to accept US players even without being physically located in the States. As they operate outside of US jurisdiction, they are free to post odds, accept wagers, and send payouts to America residents.

The Future Of Sports Betting In The USA

Sports are so often about breaking records and passing torches. To that end, because the passage and implementation of PASPA was for so long deemed the most impactful event in the history of American sports betting, it makes a kind of ironic sense that PASPA’s Supreme Court overturn now holds that lofty distinction. Indeed, the Supreme Court’s decision to overturn PASPA was a watershed moment for the sports betting industry, as it has enabled a hobby that has largely been restricted to underground methods. 

After PASPA was overturned on May 14, 2018, seven states legalized and launched sports betting within just the first six months. Two of those states—New Jersey and Pennsylvania—now have sports betting industries that handle several billion dollars a year in wagers. Dozens of states have now either legalized or introduced legislation for regulated sports betting. Even a global pandemic was unable to prevent more states from legalizing sports betting, as Virginia, Washington, and Oklahoma all paved the way for legal sports betting after the coronavirus pandemic hit the U.S. in February and March.

Most industry analysts and political insiders believe that within just a few short years, nearly 80 percent of all US states will have some form of legal, state-sanctioned sports betting product on offer for their residents and visitors. COVID-19 has placed an unimaginable strain on the U.S. and global economies, but one of the unintended side effects could be an even faster rate of sports betting adoption. Sports betting, in addition to high rates of voter approval, is an excellent industry for generating tax revenue. With the ongoing budgetary crisis faced by many states, legalizing sports betting is a fast and easy way to increase tax revenues to cover some of that shortfall. 

History of Sports Betting FAQs

How Long Have Legal Online Sports Betting Websites Been Around?

Legal online sports betting websites have been operating for over two decades now. They became extremely popular in the late 1990s and early 2000s at the same time that the internet became a dominant part of our daily lives. While many of the domestic sites ceased operation in 2006, offshore online sportsbooks have continued to serve Americans since their inception over 20 years ago.

Why is Casino Gambling Legal In My State And Not Sports Betting?

The reason mainly stems from federal restrictions on sports betting. PASPA was first signed in 1992 and it banned any state from legalizing sports betting until it was repealed in 2018. Because the legislative process takes time, states are only just now slowly considering and enacting new provisions for this activity.

Why Was Nevada The Only State Able To Offer Legal Sports Betting?

Nevada opened the first legal sportsbook back in 1949. When PASPA was put into place in 1992, Nevada was essentially grandfathered into the law because it already had its own rules in place for sports betting. Other states like Montana, Oregon, and Delaware were also grandfathered into the law but only Nevada had traditional single-game wagering.

When Did Sports Betting Become Available To Other States?

States outside of Nevada first became able to legalize sports wagering after PASPA was repealed by the US Supreme Court in May of 2018. Since then 17 states have taken the initiative to pass a sports betting bill and sign it into law. Many other states considered the topic during their last legislative session but did not pass a bill. They are expected to do it again, especially now that neighboring states have an edge in their gambling industry.

When Will Legal Sports Betting Come To My State?

Because of the repeal of PASPA, legal sports betting can come to your state whenever the state lawmakers pass the legislation. In some states, it may just be more realistic than others. States like Utah have a state culture and view of sports betting that probably will not allow for a law to be passed any time soon. States like Tennessee, North Carolina, and Virginia have recently legalized sports betting and are having to wait for it to officially launch in the state. Voters have to approve the legislation, so if you vote you would know if your state is next.

If Sports Betting Is Not Regulated In My State, How Do I Place Bets?

Even if you live in a state where sports betting has yet to be legalized, you can still bet on sports online using any of our recommended online sportsbooks. These websites are all located outside of the jurisdiction of US law and are therefore only regulated by the countries in which they are located. These websites are completely legitimate, safe, legal to use for US residents.

Who Invented Sports Betting?

Sports betting lovers everywhere can give a nod to the Greeks’ when it comes to the history of wagering on sports and how it was invented over 2,000 years ago. It was the Greeks’ that created the Olympics and with that came gambling on the competitions that took place at the Olympic events. From there, betting on sports spread like wildfire to Rome where it would become a legal activity and then slowly around the globe. Now the United States, while doing it for quite some time in the shadows, has acknowledged sports betting and states have begun legalizing the industry as of 2018 after the repeal of PASPA.